Moody's Rates Proposed Costa Notes

Wednesday, February 28, 2001
Moody's assigned an A2 rating to the proposed E300 million of senior notes issued by Costa Finance S.A. that are unconditionally guaranteed by Carnival Corporation. Moody's also confirmed Carnival's A2 and Prime-1 ratings. The rating confirmation reflects Carnival's industry leading market share and margins, the strength of its brands, as well as the risks associated with its shipbuilding program and weakening global economic fundamentals. The rating outlook is stable. Carnival will use the proceeds of this offering to repay bridge financing put in place to consummate the acquisition of the remaining 50 percent interest in Costa Crociere from Airtours plc for $510 million and for working capital purposes. The cruise industry is expected to increase gross capacity by between 12-14 percent per annum through 2004. During this expansion period, the industry may experience yield pressures given the sensitivity of demand to pricing (as demonstrated in 2000) and as the new capacity is absorbed. Carnival is best positioned to withstand any pricing pressure given its industry leading margins, and continuing emphasis on cost control. The rating confirmation incorporates the recent price weakness and expanding capacity within the cruise industry, as well as Carnival's own aggressive shipbuilding program. Carnival has firm orders for 16 new ships to be delivered between 2001 - 2005 for an aggregate cost of about $7 billion. Moody's expects Carnival will be able to finance a substantial portion of these capital expenditures with cash flow from operations except in 2003-2004 when 10 ships are scheduled for delivery. Moody's expects the pace of earnings growth to exceed the pace of debt additions except during 2003-2004 when debt levels may rise at a slightly faster rate than earnings. Also, Moody's notes that year-end leverage may be overstated due to the timing difference between ship delivery and full year earnings. Debt protection measures are expected to remain consistent with the current ratings. The rating outlook is stable given the company's ability to finance a large portion of its shipbuilding program with cash flow, as well as the positive early booking trends for 2001. Additionally Moody's expects the company to substantially moderate its share repurchase activity. Carnival Corporation, headquartered in Miami, Florida and its subsidiaries operates six brands under the names, Carnival Cruise Lines, Holland America Line, Costa, Windstar Cruises, Cunard Line and Seabourn Cruise Line. During the year ended November 30, 2000, Carnival's revenues were approximately $3.7 billion. - (Reuters)
Maritime Reporter May 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Alaska, Washington to build Arctic Icebreakers

Senator Lisa Murkowski, Alaska, and Senator Maria Cantwell, Washington, have introduced a bill that would authorize the Navy to build up six icebreakers for use by the U.

Launch of First Future Destroyer, Hobart

Speech delivered by the Minister for Defence, Kevin Andrews during the launch of Hobart - the first future destroyer: Thank you for being here on this very important day.

Fincantieri Invests In Camper & Nicholsons

Fincantieri has signed an agreement for the acquisition of a minority stake via capital injection in Camper & Nicholsons International (Camper & Nicholsons), the

Cruise Ship Trends

Ostebo Chosen to Head CLIA

Thomas P. Ostebo will join Cruise Lines International Association (CLIA) as the organization’s new president and chief executive officer, effective July 6, 2015.

Norwegian Cruise Ship Ran Aground off Bermuda

The Norwegian Dawn cruise ship with more than 3,700 people on board ran aground in Bermuda after the vessel temporarily lost power.   Small boats, divers and

GAC Sets its Sights on UK Cruise Business

Cruise Manager appointed to coordinate integrated cruise support nationwide   GAC UK is boosting its services for the cruise industry with the appointment of Fergus Poole as Cruise Manager.

 
 
Maritime Security Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1073 sec (9 req/sec)